Sam Asano's Let's Invent: Inventing basics and Bitcoin

A HAPPY NEW YEAR! This country has a population of approximately 310 million. So I am assuming that there have been 310 million, more or less, New Year's resolutions made in or around this week. About five years ago I, too, made such a resolution, and signed up at a gym after being bombarded by TV and radio ads, all of which made me feel guilty of my sedentary, unhealthy life full of bad-for-you foods.

In the first week, the gym was packed with people, and every machine was taken with some of them having a few people waiting for them to become available. I eventually inquired at the desk why the gym wouldn't install more machines. The young man smiled and replied: "Oh, I wouldn't worry. Most of them are New Year's resolution people. They'll be gone by the middle of February." Sure enough by Feb. 20, I was able to choose any machine with no wait.

This installment is actually the first one of 2014. From now on my column will consist of two parts. One about the 12-step invention process called Invention 101. The column will follow the steps through each chapter. If you maintain a scrap book collecting all weekly installment for one year, that'll give you the idea of my book, "Invention 101." The second part is an article about various technical topics that may interest you. A book about invention can be complex, detailed and could get to be a trifle boring, even though I plan to write with more animated description. So I plan to compensate the tedious part with the second section that could contain some humor.

I sincerely hope that your New Year's Resolution to become an inventor, or bring your concept to fruition by learning how to do it right doesn't evaporate like those people in the gym in February.

Since there are 12 months to a year, and there are 12 chapters in this series, it is easy to name each month by the name of chapter. A month consists of four or five weeks, so each chapter will be concluded in more or less even length. The book, which would be the result of editing the columns, summarizing them and adding various graphics and charts in the form of a handbook, would be available in the market some time in the future.

OK, shall we start? Don't give up.

Chapter I: Inception

All invention starts from someone perceiving a problem and attempting to solve it. The solution is the invention, and whoever develops the solution is the inventor. In the narrowly defined description of an invention, the problem must precede its solution in time. One can think of inventing a solution for the problem that presently doesn't exist, however, that is not applicable to this Invention 101 column.

Part II: Hearing on the streets.

Have you heard of a fictitious currency called Bitcoin? If you are normally a curious person, you'd ask "What is it?" And the answer, which comes back is often vague and not very thorough.

Bitcoin is actually a currency that exists on the Internet. It is often called virtual — or worse, fictitious — currency backed by basically nothing. I personally know and mingle with many geeks who are experts on the matter of the Internet. When I ask them about Bitcoin, their response is split into two clearly opposing camps. One camp takes an extremely hostile attitude. His face filled with derision and disdain, he asks me "What? You now deal with drugs?" This camp acts as though I am a criminal just because I asked the question. The other camp responds to me with a more deliberate and thoughtful response. They often say they had thought about it sometime and haven't quite understood the entire system.

Bitcoin was invented by a Japanese man named Satoshi Nakamoto circa 2008-09. As a Japanese speaking person, my response when I hear his name is that this is a fictitious name like John Doe. The name is too average to be considered real although it is possible this person exists. Geeks of the Internet world have looked high and low for this man, and they cannot find him.

Normally a currency like the dollar, euro or yen is issued by the central bank, whose reserve holdings more or less becomes the backing of the currency's value. Although the gold standard is no longer used, the aura (or feeling of solidity) is very much there when we deal with the U.S. dollar. In case of Bitcoin, there is no such reserve system. Except that the total amount of circulation is limited to 21 million BTC (bitcoins) at all times, the relationship of one bitcoin to that of gold value doesn't exist. The actual value of bitcoins can, therefore, fluctuate anywhere from near zero to thousand of dollars.

United States is the most advanced and Bitcoin-friendly country followed by Japan and some countries in Europe. Yet, a Bitcoin exchange called MT.Gox in Tokyo seems to have some sway in the overall flow of things. Bitcoin can be used to pay for merchandise, and its transaction cost is much smaller than credit cards. More and more merchants are stepping up to use bitcoins and/or considering joining the movement. Some people are trading in the Bitcoin just like pork belly or corn future. A site called Silkroad has extensively traded various contrabands with bitcoins, and is now closed by the federal government.

If you wish to learn more about this rather vanguard affair on the Internet, go to Google and see Wikipedia and other publications on the subject. After reading several articles, my mind is NOT very clear as to what it is. I don't blame my hostile geek friends. Whether Bitcoin would ultimately succeed in the world of currency without even a hint of backing of some real value remains to be seen. Already a German Bundesbank's board member issued a warning that "the virtual currency is risky due to its high volatility and way it is constructed" (Financial Times Jan. 7, 2014).

Now if any reader of this column asks me, "The subject of Bitcoin has nothing to do with invention. Why discuss it?" My answer is Bitcoin is very much an invention. Invention is not limited to gears, shafts and power supplies. What solves a problem is all invention.

Shintaro "Sam" Asano of New Castle, who speaks and writes English as a second language, was named by MIT in 2011 as one of the 10 most influential inventors of the 20th century who improved our life. He is a businessman and an inventor in the field of electronics and mechanical systems, who is credited as the original inventor of today's portable fax machine. He also developed a data tablet used in the retail point of sale to capture customer signatures when credit cards are used. Write to him at sasano@gmail.com.